The Pakistan Coup detat of 1958: Part II

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You can read: ‘The Pakistan  Coup detat of  1958: Part 1 on by clicking the link: https://pakpotpourri2.wordpress.com/2014/05/04/the-pakistan-coup-detat-of-1958-part-i/

Naveed PicBy Naveed Tajammal

As stated before there were no cogent reasons for both the coups i.e that of 07/08 Oct & 27/28 Oct 1958-Other than sheer greed for more power. If you even take a cursory glance at the development, between 1947 & 1958 it proves how, the later false the propaganda was done by the Ayub Khan Regime to show its Golden 10 years-[1958-1968]The first phase of development, was complete by 1958,indeed Robber Barons had been created with free funds. However, the Industry had come up-literally from a ground zero like position- Do keep in mind that two 5 Year plans, from 1947 onward had been planned till 1960-and funds ear-marked The data below just gives glimpse of a few salient features.

In 1947 at the time of our Independence our total textile industry had only 177,418 spindles and 4,824 looms in 1958 there were 1,844,000 spindles and 28,000 looms. Although Pakistan was harvesting 6 million bales of raw jute in 1947-All jute was sent to Calcutta before independence where partly it was processed and the rest sent within the British Empire’s industrial units abroad. Likewise all other produce of East Bengal, which was surplus to its requirements was again sent to Calcutta-and it would not be an exaggeration, that the prosperity of Calcutta as the Capital of former British Indian Empire had been built on the exploitation of the resources of East Pakistan [East Bengal].

East Pakistan which did not even have a single jute loom in 1947-had  by 1958-8,000 jute looms and which were producing 1,50,000 tons of jute manufactures. The port of Chittagong was so small that it could only handle 0.5 million tons per annum, in 1958 it was handling 2.5 million tons. As the port of Chittagong was built almost anew with new quay walls, new cranes and new goods sheds, the project had cost $ 20 million, work on the new Chalna port ,later it was shifted to Mongla in East Pakistan ,and work was finished in 1954,and was taking almost one million tons of goods. The raw cotton produced in West Pakistan regions in pre-Independence was fully transported to Bombay-Ahmedabad and Cawnpore Finished cloth was re-shipped, from these three cities for local consumption.

In 1947-there was not a single spindle producing woolen goods-by 1958,there were 13,700 spindle producing about 18 million lbs. of woolen yarns-which were equal in quality with imported woolen cloth. There was only one hydrogenated oil factory producing 2,500 tons of vegetables product. In 1958 there arose 6 more factories producing 20,000 tons per annum. Sugar produced in West Pakistan in 1947 was 7,932 tons, by1958 the production was 123,558 tons. In East Pakistan 5 mini sugar mills were producing 23,061 tons of sugar, by 1958 with an addition of 3 large sugar mills there was a addition of another 30,000 tons.

There was no cigarettes factory in Pakistan in 1947-by1958,Six new factories were set up in West Pakistan and two in East Pakistan-total cigarettes production was 7469.7 million. In East Pakistan Karnaphuli Paper mills ,established by PIDC had come in production by 1953 producing 30,000 tons, the biggest than in Asia-though it is amazing why Ayub Khan, handed away on a platter, this unit to the Dawood group in 1964.

Beco was set up in 1951-At Badamibagh Lahore, with the help of European & American technology it had started producing high quality machine tools, pumps, power looms, concrete mixers cranes, power presses, electric motors ,by-cycles, steel rolled products, electric transmission towers and structure & general fabrication. Local indigenous mechanical & electrical units had started the manufacture of 20 H.P. Centrifugal Pumps-along with 20 H.P. Electric Motors, and electric fan industry too had emerged, and other electric goods were also being made. In Karachi production of electric cable manufacture and electric bulbs had started, the German Firm A.E.G had set up a unit which was making electric motors, transformers and other heavy electric gear, a Swedish firm was producing packing material and packages for cigarettes, tea and pharmaceutical industries, American General Mills had set up a plant in Karachi to produce gum of local raw material. Glass industry too had emerged in both the wings, inclusive of sheet glass. The cement production in 1947 was barely 325,000 tons by 1958 it was producing 1,000,000 tons. Two of these new factories had been financed through the Colombo plan-and generous aid given by Governments of Canada and New Zealand. And were producing under Maple Leaf & Zeal-Pak Cement-and were being expanded as per the second 5 year plan to add 200,000 tons more in the total Cement production.

Plastic, pencil, high grade board, card board etc etc industries had started their production much earlier in 1950’s,Assembly plants for cars, trucks, radios etc had already been set up. The Sports goods industry had done a tremendous work and expanded very fast by 1958 was earning in those days value of dollars-$ 2.70 million. Pharmaceutical industries had been set up, some were manufacturing drugs and others repacking them-all the same the industry had started to work, a Penicillin plant was under erection, whereas the D.D.T plant was already in production, both the plants had been financed by UNICEF, as to the role of multinational companies like I.C.I had been operating the soda ash plant at P.D. Khan ,in 1944,however it was in 1952 that they started fully investing in Pakistan, Unilever had set up its main plant in Rahim Yar Khan in 1948-with it came its wide range of soaps and detergents and Ghee and oil products. Plants producing caustic soda were set up. Sulphuric acid plants were set up in both wings, with plant producing Alum, the fertilizer production of ammonium sulphate had reached 50,000 tons. Two more plants in both the wings were under erection and installation and each would produce 100,000 tons, thus bringing total to 250,000 tons.

Bayer’s multinational company was in process of setting up its plant of basic dyes. Many small cottage industries had sprung up. Handloom textiles were being exported to U.S.A. The Pakistani-Surgical instruments, too had established their market in the world.

The Government of Pakistan had already established in collaboration with foreign firms two industries, the First being the Security Printing Press, with the help of De La Rue’s as partners, this press had started the printing of our currency notes-The second was a collaboration with Siemens to produce telephone instruments and telephone exchanges. Vegetable oil total production had reached 100,000 tons by 1958.Sui Gas pipe line till Karachi had been completed by 1955, another had reached Multan, and this line was laid to feed the Multan Electric Company and the Fertilizer Plant. And the third had been earmarked for Lahore and Lyallpur [Faisalabad]-A small natural gas pipe line had been laid extracting gas from the oil fields of Rawalpindi region and was supplying 6 million cubic feet of gas per day. In East Pakistan the major share of Gas was being utilized by the Fertilizer plant, and Cement Factory at Chhattak. The production of gypsum arose from 1947 [15,866]to 64,064 tons in 1958,coal production arose from 358,000 tons to 516,000 tons, limestone from 341,000 to 913,900 tons, crude petroleum from 13.2 million Imp Gallons to 76.9 million Imp Gallons. Negotiations with different foreign, companies were under way to set up an Oil Refinery.

At the Time of our Independence due to War efforts and maximum bulk of transportation done via the Railways-and the British seeing the changing tides after 1945 had stopped investing in this sector-The  track and rolling stocks had suffered very badly and were considerably run down-Pakistan after 1947 had to undertake a large scale urgent repairs programme-Pakistan obtained two loans of $ 27.2 million and $31.1 million from International Bank for Reconstruction and development, and with these loans had bought diesel electric engines, wagons, carriages and track material-in addition USA also assisted the Railways by financing the purchase of diesel electric engines. The Govt of Australia too gave in AID a large number of diesel electric engines-It had been envisaged that a further $ 140 million  was required to fully restore the Railways because of neglect and usage in the 6 years of second world war.

It would be interesting to note that in 1948/49 the goods carried in East Pakistan Railways were 3,838,000 tons in 1956/57 they were 4,603,000 tons, in West Pakistan the Railways carried ,in 1948/49 6,356,000 tons and in 1956/57 it was  10,866,000 tons, the passenger traffic in East Pakistan in 1948/49 was 67,500,000 and in 1956/57 it had increased to 86,783,000,in West Pakistan it was 71,654,000 in 1948/49 and by 1956/57 it had increased to 95,535,000.It was a dedicated team work of Railways that in spite of faults within they carried on the their Job.

Pakistan hardly had any Shipping in 1947-the gross tonnage was 6,000 tons, by 1958 it was near 162,370 tons, in 1957/58 Pakistan had acquired 10 ships with 64,629 tonnage. As the distance between Karachi and Chittagong was 2500 miles the need for Airway Cargo was felt so a fleet of super constellations was operating 8 services/week by 1958,for flight passengers, there was an addition of 5 new viscount planes, out  of which 3 were already in service.

Post, telegraph and telephone services had been upgraded substantially since Independence, The assets in 1947 were only 36.5 million rupees, by end of 1957, they had arisen to 244.8 million rupees. There were only 15,000 telephone connections in 1947 by end of 1957 there were 56,000.

At the time of Independence there were only a few banks registered in Pakistan, except for Habib Bank, other banks were very small having a total capital of no more than two million rupees. National Bank of Pakistan was started by GOP in March 1950-The Govt was using this bank for financing of food grains and it was helped by the State Bank with funds, the deposits of NBP stood at 755 million rupees in December 1958.

Soon after Independence 8 million refugees migrated to Pakistan and those who left were less than 5 million, it was these 8 million who had to be adjusted. The GOP set up a Refugees Rehabilitation Finance Corporation by an Act of Parliament, a total of 40 million rupees was loaned to these refugees to establish them in small trades and industries besides the lion share of lands and properties which came under evacuee properties.

Karachi as per 1941 Census had 400,000 people, even in 1947 it had swelled to 4.5 Lakh only, by 1957/58 it was hovering at 1.78 million. When GOP decided to make Karachi as its capital it had neither accommodation nor offices. The GOP set up a HBFC [House building finance corporation] till 1958 it had given loaned out 52.8 million rupees. To finance industries PIFC [Pakistan Industrial Finance Corporation] was established by 1958 120 million  rupees, had been given to borrowers.

PICIC [Pakistan Industrial Credit Investment Corporation], had been established likewise-The International Bank had given it a loan of $4.2 million. U.S Govt gave it three million rupees while U.K. gave three million and Japan two million, as industry grew USA gave a further loan of 30 million rupees, and State Bank injected another 30 million rupees.

Numerous Co-operative Banks and Co-operative societies had been established all over the both wings. Agriculture Finance Corporation had been established in 1953, by 1958 it had loaned out 14.7 million rupees. As Pakistan had 100,000 villages it was felt that Agriculture Bank was needed so in 1957, this Bank was established.

A Land Reform Commission was established in 1957 and in Jan 1958,the Commission presented its report to the GOP, after one week deliberation the GOP accepted the recommendation, The Commission had ruled a law, by which compensation was to be given to the landlords on a sliding scale, the smaller the landholding the better the compensation, the commission had recommended,500 acres of good irrigated land or 1000 acres of un-irrigated  to each landlord-The surplus land of landlord was to be distributed to the tenants, who were to pay the price in easy installments, and become the owners, to stop the fragmentation of land, a minimum holding of 50 acres was fixed which could not be reduced either by gift or sale [Agriculture-Ch v, ”Ajj Aur Kul”-Syed.Amjad Ali,1959.]

After Independence Pakistan became, what USA had faced in the 19th century, because of the Gold Rush -all small time Muslim-traders spread throughout the length and breadth of British Indian Empire even from Burma and Singapore Converged into both the wings-Gustav F Papanek, the author of the book, ‘Pakistan’s : Development-Social Goals & Private incentives’ Harvard University -1967,who had interviewed the Top 100 people in our Industry in 1958/59,amongst them were the famous 22 Families too, found that only 17 out of 100 had some experience of Running a industry-rest were all Traders and exporters, mainly of Hides & Skins.

Gustav Papanek-remained associated with our Planning Commission from 1954 onward-as the Project Field Supervisor to the Harvard Advisory Group attached with the Planning Commission.

Massive concentration of wealth the coffers of a few about which rumours,had been circulating since mid-1950’s,became a reality, after the report of a Credit Inquiry Committee of State Bank of Pakistan, revealed that, in all, only 222 individual depositors in both the wings were making use of 2/3rd of the total credit facilities offered by the banking system, earlier Gustav Papanek too had observed that out of total 3,000 firms/companies established in Pakistan since 1947 till late 1950’s-Only 24 out of 3000 Controlled nearly half of the Industrial Assets within Pakistan. The massive industrialization done between 1947 from ground zero like conditions till Ayub Khan took over, resulted in utter chaos under his Thumb Rule-Ayub Khan became a puppet in their hands-the result was that between 1959 to 1965 these few families had gained total monopolies in our country-it was then that Dr. Mahboob ul Haq had made his famous speech in Karachi in 1965,being the Chief Economist with the Planning Commission, he had stated that Pakistani economy was dominated by just 22 odd families who owned 66 % of the total industrial assets,70 % of insurance & 80 % of the banking.

This concentration of wealth became one of the causes of effective slogans raised by separatists of East Pakistan and was,also the political slogan of  ZAB & his PPP, which led to badly handled-Nationalization.

[To be continued]

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Comments

  • naveed tajammal  On May 8, 2014 at 4:08 pm

    Thank you Yasmeen Aftab Ali-for the post.

    • Yasmeen Aftab Ali  On May 8, 2014 at 4:35 pm

      You are welcome! 🙂

  • Inam Khan  On May 9, 2014 at 2:59 am

    Governments changed hands every six months.The politicians were sqaubling even then and this gave chance to Iskandar-Ayub combo to take away power from the politicians.

  • Ajmal  On May 9, 2014 at 7:51 am

    The so called 22 families, if they were there did make massive contribution towards the development of the country. Later a political clown, through Nationalization policy destroyed their all achievements and ultimately the Two families, one led by his maverick son in law and the second led by the adopted son of yet another Ameer ul Momineen.

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  • By The Coup of 1958 Part IV | Indusperson on June 1, 2014 at 11:20 am

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  • By THE COUP OF 1958-PART V | Pakpotpourri2's Blog on June 2, 2014 at 2:56 am

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